Carlyle Group terminates plan to snap up troubled Chemring

Michael Bow is a reporter at City A.M. covering private equity, funds, investments and asset managers. He can be reached on michael.bow@cityam.com

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Michael Bow

JUMBO US based alternative asset manager Carlyle Group yesterday pulled out of plans to buy British defence firm Chemring following months of talks between the two firms.

Carlyle, which owns Dunkin’ Donuts and Hertz car rental, had already sought two extensions from the Takeover Panel to try and strike a deal with the FTSE 250 firm following its initial expression of interest on 17 August. Yesterday Carlyle said it had given up on plans to make an offer.

It follows a profit warning issued by Chemring at the start of this month and the resignation of its chief executive David Price and appointment of new boss Mark Papworth in October.

Chemring’s shares plunged almost 14 per cent on the announcement, their lowest level for over a year.

In a separate development, Carlyle yesterday announced it had raised $1.1bn from investors which it plans to invest in mid market US firms.

Carlyle will use the cash raised from investors for its Carlyle Equity Opportunity Fund. The fund will inject equity of between equity capital of $25m to $150m into mid-market firms.

“We see incredible opportunities in this large and under-served market and have a great team to pursue them,” Carlyle managing director Rodney Cohen said.